Practice management addresses payment matters

March 2006

All too often when patients are told they have a personal balance, their response is, “Not me. I don’t owe you money! I just pay my copay, and my insurance does the rest.” We, as pediatricians, and our staff know all too well that there are many reasons why patients may owe us money!

Perhaps this family has not met its deductible. Maybe a non-covered service was provided. It is possible that the family neglected to tell us that there was an insurance coverage change. It is also possible that the insurance company owes us, the doctors (I hate the word provider), money. Many physicians cannot believe that managed care organizations (MCOs) may have made a mistake when there is a denial on an explanation of benefits (EOB). It does happen, however, and more often than we may think.

Let’s look into these situations and see how we can collect the monies due us.

Collecting from MCOs

To address an MCO’s mistake on an EOB, you must first have reviewed the EOB. I am always shocked when consulting for a medical practice to find that some practices never examine an EOB. They simply apply what was paid and write off the balance. Not only is it essential to do so, but it is also important that at least two people review them, one of whom is a doctor.

In our five-doctor practice, we have a very experienced person review all the EOB and then I review them. Only after we have checked an EOB will we apply it to a patient’s account. We look for downcoding, bundling and dropped charges (ie, paying for a vaccine but not listing the appropriate CPT code for the vaccine administration). We also check for denials of the stackable codes, such as 99050, which is used when seeing patients on Sundays, holidays or after hours. (It replaces 99054.)

It is also important to look for denials on services, such as a nebulizer treatment (CPT code 94640), which occurred during the Evaluation & Management of an asthmatic patient (CPT code 99212-5). The reason often cited by the MCO is that the doctor was not a specialist and, therefore, not permitted to provide a particular service. These latter two examples can be overturned after discussion with the appropriate medical director. If there is reticence from the medical director to pay for these services, you certainly could advise him/her of the consequences. You could send those patients to the pediatric pulmonologist or to the emergency department (ED). The cost savings to the MCO in having the primary care doctor treat becomes readily apparent. We are much more cost-effective than the ED doctor and the ED utilization fee or the higher cost of a subspecialist! The same holds true for seeing patients on Sundays. Again, it is doubtful that the MCO wants to pay an ED doctor and the ED utilization fee to see these patients. We will not, however, see the patient for free. Pediatricians should not forget that usually we are a less expensive alternative for providing care.

Another significant problem that you face occurs when receiving payment for vaccines. Problems often arise when a vaccine changes or a new vaccine has been released. The good news is that you don’t each have to call every MCO about these changes. The AAP sends out more than 1,800 letters to MCOs with this information. In New Jersey, the local chapter sends e-mails to medical directors directly. The responsibility is yours, however, to quickly notify an MCO when errors occur with vaccine payments. (I also hate the word reimbursement.) Sometimes the solution is as simple as sending in a copy of a vaccine invoice to the medical director. As a rule, medical directors are not a bad bunch of people.

When an EOB is problematic, the pediatrician’s first line of defense is the provider representative of the MCO. As with all things in life, there are representatives who get things done and there are those who don’t. If you have exhausted the usual route in attempting to resolve your EOB problem, ask to speak with the provider representative’s supervisor. If that fails, make contact with the medical director. Much to their credit, I have found most medical directors to be understanding, reasonable and helpful. If, however, you have hit a brick wall and no one is able to help you, contact Lou Terranova at the National AAP office or fill out an AAP Hassle Factor Form.

Now, you are an expert at collecting monies owed you by the MCO. Let’s turn our attention to ways to collect monies owed by patients.

Collecting from patients

Sending patients a billing statement, no matter how detailed or elaborate, is not always effective. Many patients feel that once they pay their copay, their obligation is finished. Therefore, they ignore all billing statements, which cost about $4.50 per statement. If the EOB states that there is a patient deductible, make a copy of the EOB and send it along with the billing statement. If patients still refuse to believe that they owe money, remind them that it is their responsibility to follow up with the MCO, not yours. Take the same approach if the family owes money for a non-covered service.

If patients have terminated insurance with one carrier and have neglected to inform the office of the new information, be courteous and resubmit the charges to the new MCO. Just make sure that not much time has elapsed since the date of service, or you won’t get paid due to a lack of timely filing. You can help to avoid this last eventuality by verifying patients’ insurance information at each visit.

The newest fly in the ointment in getting paid is associated with Consumer Directed Health Plans and Health Savings Accounts, but these will be addressed in another issue.

Hopefully, you will find these techniques for obtaining payment owed you to be helpful. At the very least, it should aid in shrinking your accounts receivables. When dealing with a particularly tricky account and all else has failed, look to a future article that will deal with mechanisms for collection of monies owed.

Good luck!

For more information:

• Dr. Lander is with the AAP’s section on administration and practice management.